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I had to chance to attend a talk organised by Cambridge Health Network on primary care in the UK (Primary care, the holy trinity: quality, commissioning and the front line). Full disclosure – my knowledge about the UK health system is very limited.

Most of the challenges faced in developed countries like UK seem alarmingly similar to the ones faced in the developing countries like India. Specially, with regards to primary care, every stakeholder – including the Department of Health, jobbing GPs, CCGs, provider networks, quality commissions, etc. – mentioned the following as the challenges:

1. Quality of care

2. Long patient waiting times

3. Role of GPs

4. Increase is the use of specialists even for simple cases

4. Poor infrastructure in the premises (I think they use the word ‘poor’ with a good measure of indiscretion)

It is oddly unsettling that all of these challenges are very similar to those in India.

With advent of protocol driven healthcare, and algorithms replacing the need for triaging, the method they have adopted is use of technology. This again is strangely similar to what is being done in developing countries, BUT with a distinct difference. UK seems to be trying to keep its patients away from hospitals (while keeping the quality of care consistent with standards) whereas countries such as India are trying to move towards institutionalised care (and ultimately, Universal Health Coverage).

So the question, once again, can you achieve different outcomes by doing the same thing?

One nice gentleman summarised the ideal model of healthcare in this way:

First Level of Care: Self-help (through technology and telemedicine)

Second Level of Care: Family & Community (through technology and networks)

Third Level of Care: GPs and Surgeries

Fourth Level of Care: Hospitals

Final Level of Care: Super speciality hospitals

Based on what I learnt from the audience in the room, this model of care is inevitable and there are a lot of companies working on the first and second level mentioned above (The Hurley Group and DrThom).

Dispensing with those ghastly p and R-squared values, and other such professional writing etiquettes and verisimilitudes, I am going to write about my learning from my work related to public drug procurement in this post.

Just for laughs, I am going to put my thoughts in a way that I usually would in an academic journal/ policy brief but will also include what I am actually thinking (italicized).

(If you free up people who sometimes try to work (bureaucrats) from the people who pretend to think about trying (politicians), then things get done faster and better)

2. Length of payment cycles has an inverse correlation with the (positive) variance of procurement price compared to national and international reference prices

(Pay your bills on time to get your stuff at cheaper rates!)

3. The political structure of a state has some pronounced effects on procurement. Contexts of the states need to be well evaluated before embarking on a particular procurement model/ changing the existing practices

(Red tape is NOT the tape that holds a nation together. If a Health Minister insists that his wife’s brother-in-law should be awarded majority of the supply contracts then setting-up an autonomous agency would probably help the public interest. )

4. Eliminating wastage of drugs, caused by mishandling or expiry, is necessary to optimize expenditure and ensure availability. The current investment in storage infrastructure is negligible. Regional warehouses/ drug depots and drug stores in the hospitals need to comply with storage norms

(Medicines should NOT be stored in unused lavatories, assorted fungi should NOT be growing inside IV bags, employees should NOT store their lunch with ELISA Kits & high-value antibiotics in the refrigerators)

(How much of weed must one smoke to accept an internal quality certificate provided by the manufacturer as the quality standard? In case you are wondering, there are some weird states that only do quality testing on those batches only if adverse drug reactions are reported – Essentially, the first response and the last option are the same! )

When I started my work on access to medicines in 2010, I wanted to answer a few critical questions (listed below).

1. Is the procurement price solely determined by the procurement process? Is it influenced by or immune to market externalities?

2. Some states follow a system of centralized rate-contracting and decentralized purchasing (Maharashtra) while others have centralized rate-contracting and purchasing (Tamil Nadu, Punjab, Odisha, Kerala). Does decentralized purchasing offer the states the theoretical advantages of faster decision making, promoting bottom-up planning etc.?

3. Kerala (Kerala Medical Services Corporation), Tamil Nadu (Tamil Nadu Medical Services Corporation) Punjab (Punjab Health Systems Corporation) and Odisha (State Drug Management Unit) have a system of centralized procurement. What are the finer differences between the four models and do these differences reflect in the efficiency of the models?

4. Tamil Nadu’s model is widely publicized as an efficient model for procurement in the Indian context by WHO, DFID, High Level Expert Group on Universal Health Coverage etc. Is the TNMSC model only replicable in specific scenarios? If yes, what are the critical success factors?

5. Kerala and Odisha have adopted (with changes) Tamil Nadu’s model for drug procurement with varying outcomes. What changes led to the varying outcomes?

I tried to answer questions 4 and 5 in the paper I wrote for the Economic and Political Weekly (EPW) last year. [Link to the paper]

Here is a paper I recently wrote for the British Medical Journal (BMJOpen) that (partly) answers questions 1, 2, 3 and 4 by comparing the procurement processes and prices of Tamil Nadu, Kerala, Odisha, Maharashtra and Punjab. [Link to the paper]

Most states are attempting to copy the Tamil Nadu Medical Services Corporation’s model of centralised tendering and purchase of drugs. A study of the Kerala Medical Services Corporation and Odisha’s State Drug Management Unit shows that imitating the original model without factoring in the local context and building up the processes does not lead to success. While Kerala has adapted the Tamil Nadu model and even added innovations, Odisha’s experiment has had dismal results.

Read the full article I wrote for the Economic & Political Weekly here.

Our visit to the Indian state of Kerala was to understand about the state’s drug procurement system, Kerala Medical Services Corporation (KMSCL). KMSCL is an autonomous drug procurement agency that is responsible for the procurement and distribution of drugs to all the public health centers in the state. During this visit, we were introduced to a novel initiative, Karunya Community Pharmacy, that KMSCL undertook in its ongoing endeavor to improve access to essential medicines.

The fact that drugs constitute a high portion of the out-of-pocket (OOP) expenditure on health has become common wisdom. In India, the proportion of drugs accruing in the health expenditure ranges from 16-65%, varying by state. The literature also shows the catastrophic impacts that OOP expenditure on health can cause to people. Various recommendations have been provided to the government to address this problem at a micro level by increasing access to essential and affordable medicines to individuals and households; and at a macro level by keeping a check on the increasing prices of drugs and modeling efficient supply-chain systems to make drugs available.

Karunya Community Pharmacy is a retail outlet that sells branded generics at steep discounts ranging from 20 to 60 percent. Karunya Pharmacy is an initiative by KMSCL and it is a pure for-profit chain of pharmacies. It is a business model that competes on equal terms with other retail pharmacies. The advantage Karunya may have over other pharmacies is cheaper prices through bulk procurement for the entire state and taking advantage of the streamlined procurement practices of KMSCL. The need for it’s existence has been necessitated by two factors: a) the strong nexus between government doctors and pharmaceutical sales representatives that results in a positive push for branded medicines and a negative push for pure generics (not unlike other Indian states); b) Kerala populace’s preference for higher quality products (unique to this state).

The modus operandi adopted by the pharmacy was to leverage the bulk discounts enjoyed by the KMSCL through centralized pooled purchasing of branded generics directly from the manufacturers. The reduction in the prices due to the bulk discounts and lack of middle-men margins are significant. The future plan for this initiative is to increase the number of pharmacy outlets to about 2,500 stationing them at all government district hospitals, taluk hospitals and community healthcare centers in the state. Karunya Community Pharmacy also plans to stock specialty drugs for the treatment of cancer, renal disease, hypertension where the discounts would impact the beneficiaries the most. In short, this community pharmacy would act as the sole carrying and forwarding agent for a majority of the pharmaceutical manufacturers.

The repercussions of the first pilot in Thiruvananthapuram have been very significant, driving three private pharmacies out of business within two months of operation, according to the MD of KMSCL, Biju Prabhakaran. The State had also announced its ambitious plans of having several such outlets in all the districts near the public hospitals. While it is an interesting and a good endeavor, its continuation requires political support and addressing the protests from the retail pharmacists and industry lobbies. This model has the potential to revolutionize the pharmaceutical retailing business in India if executed tactfully.

The organization I represent, ACCESS Health, has been associated with an initiative called the Center for Health Market Innovations (CHMI). It is an interesting compendium of healthcare models across the world that many deem innovative (albeit there are no set inclusion/ exclusion criteria). The initiative provides profiles of about 1,135 innovative models with interesting data if one is interested in investigating any trends (Link here; look for the “Download database” link). The innovations are categorized into five buckets – Organizing Delivery; Financing Care; Regulating Performance; Changing Behaviors; Enhancing Processes. I have had considerable involvement with this initiative at ACCESS Health and below are my thoughts on models that others believe are innovative.

This is how I would define innovation in this context: any model that can decrease the cost of conventional service delivery (significantly or marginally) or increase the access to care (both physical reach and financially) or both.

Based on my experience, I believe that any healthcare service delivery innovation can be safely classified into the below three vectors or a combination thereof:

1. Cheaper Supplies:This is obviously a no-brainer. No points for guessing! Supplies here primarily mean medicines but also include equipment. Usage of generic medicines, efficiently estimating and forecasting their demand, optimum procurement, scientific inventory management and distribution and last but not the least influencing patient behavior to promote the use of generic medicines. Here is a classic example of a model doing just this (Link Here)

2. Cross-subsidisation: Using the user-fees generated from a relatively affluent patient population to finance care for the not-so-affluent patient population. While there are straight forward models that utilize this method, like LVPEI or SEVA, a few models that use some form of social/ community insurance to finance care also fall under this category. In the latter case, cross-subsidization is achieved through risk pooling (assuming, no adverse selection).

3. Task Shifting: Training un-skilled/ semi-skilled people to perform tasks that would have otherwise been carried out by people who are more expensive to deploy. For example, using nurses to carry out preliminary screening instead of doctors or using people who have at least 10 years of formal education to perform paramedical duties. This is the most common method used to reduce cost and increase patient turnover. (Check here and here)

For the past few months, I have been visiting various government health facilities in Bihar, Uttar Pradesh, Odisha and Kerala for quite a lot of reasons. It was a phenomenal experience meeting with medical officers of public health facilities; district magistrates; epidemiologists; drug procurement directors; health secretaries; public health experts; folks from international aid agencies and so on…

These visits have been emotionally draining in ways that I did not anticipate. I promised myself that I would never willingly do this again but, as always, you never say never!

Much has been written about India’s corruption, red-tape and whimsical policy making (Read this editorial from The Economist). The reason I am writing this post is to let everyone know that despite all the muddle at the top, there is still light at the end of the tunnel. Allow me to present my argument in the form of a couple of incidents that I have witnessed. These incidents involve government employees who have taken great personal and professional risks to perform public service. (It goes without saying that they shall not be named for their own benefit and also to honor their trust in sharing their stories with me).

As a part of the National Rural Health Mission, the government has allotted a certain sum of “untied funds” to each public health facility in the country. Recognizing that bureaucratic hassles in mobilizing funds from district headquarters to facilities, these “untied funds” were given to mitigate this problem and promote bottom-up planning. As is the case with any government monies, these funds were bound by an elaborate set of guidelines. I met the Medical Officer In Charge (MOIC) of a block I visited in Uttar Pradesh who said that the main problem they faced was that the patient referral system (particularly the transport) was in a pathetic state. Absentee ambulance drivers, dilapidated ambulance vehicles and lack of funds for fuel has led the referral system to this sorry state. Identifying this as an important local need, the MOIC wanted to use the untied funds to hire an ambulance driver, if not on a yearly basis at least whenever there was an emergency need. Unfortunately, the guidelines did not allow him to do so and him doing it anyway would have been career suicide (Read here for the news coverage on the NRHM Scam in UP & the CBI Enquiry of the same). The MOIC went ahead and did it anyway but he masked the ambulance expense under other overheads – This was at a time when every signatory authority in the state was terrified about the CBI scrutiny. He just said this “I simply could not sit and do nothing while the patients in critical condition died in my hospital”

In another instance, I met the heads of procurement of two states – Both extremely smart and enterprising senior IAS Officers. Weary from fighting the system from within for years but carrying on nevertheless to create a positive change. Both these guys numerous court cases against them, received death threats and transfer requests because extensive negative lobbying of small-scale industry (SSIs) bodies and political parties. Imagine a situation in the government hospitals when IV Fluid bags have plants growing in it and a box of while tablets have been discolored due to a variety of fungi growing in it. These people have brought the medicine situation in the state back from such a horrid nightmare and now they are accused of framing anti-industry policies when they raised the quality bar a bit higher. Let me tell you what I mean – the head of procurement in one state proposed that the minimum required annual turnover for tender eligibility be revised from 1 million rupees to 100 million rupees – Not outrageous when you expect a supplier to honor a Purchase Order of 50 million rupees in 60 days. As luck would have it, all the SSIs contested this in the state High Court and the case went on for 2 years (during which time the state did not purchase any drugs through tenders) after which the High Court ruled in the SSI favor. (This was eventually overruled by the Supreme Court only a couple of months ago).

All of this is to say that there are still a few good men left. Clearly, JP Narayan agrees with me (watch his speech here)